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Sugar Industry

Dáil Éireann Debate, Thursday - 11 October 2018

Thursday, 11 October 2018

Questions (20)

Martin Kenny

Question:

20. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine his plans to invest in the sugar beet sector. [41468/18]

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Written answers

As the Deputy will be aware, in 2006 the EU introduced a restructuring mechanism intended to reduce overall production of sugar, acknowledging the then global over supply and resultant low prices being achieved.

Greencore, as the holder of the entire Irish sugar quota at the time, availed itself of this voluntary initiative, ceasing production and dismantling its processing facilitates.

As part of the relinquishing of its sugar quota, Ireland secured €353 million as part of the reform package, with some €220 million being distributed to beet growers and a further €6 million to machinery contractors in the sector.

In the intervening years, global production has continued to exceed demand and prices unfortunately remain at historically low levels. To illustrate, during the height of a sugar beet industry in Ireland growers were receiving payment approaching €50/tonne whereas in 2018, growers in the UK are receiving approximately £22.50/tonne (€25/tonne) for sugar beet with a price drop of 15% quoted for 2019 harvest of £19.07/tonne (€21.36/tonne).

As part of the reform of the CAP under the Irish Presidency, agreement was secured on the abolition of sugar quotas from 30th September 2017. From that date, investors in the European Union, including Ireland are free to invest in sugar producing capacity if they wish.

Notwithstanding this, a number of groups expressed an interest in the redevelopment of the sugar sector, two of whom prepared desktop feasibility studies between 2010 and 2011. In their findings, both proposals sought to develop a new sugar and bio ethanol production facility with capital costs, estimated at the time, of between €250 and €400 million.

The current "Programme for a Partnership Government" states that "State Bodies will be asked to examine any substantial business plans relating to rebuilding the industry with a view to considering appropriate State supports".

Any such business plans would need to be supported by a sufficiently robust business case, having regard to the price of sugar, to attract the substantial funding required from investors for such a new start-up industry.

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